"The report highlights its pension fund has been full to the brim with fixed-interest securities and index-linked investments and little else. Equities weightings have been close to zero.

"The conspiracy theorists wonder whether the Bank knows something we don't and has been positioning itself for a sustained period of rising prices.

"However, the figures quoted were for the fund's asset allocation a year ago, when the oil price was still rocketing and inflation was an imminent issue.

"We won't find out whether the trustees of the Bank's scheme changed tact until September but it has set tongues wagging." Johnston believes even if deflation is avoided a period of low inflation looks likely.

He said: "While the inflationary camp gains popularity, the chartists suggest that deflation (when prices fall) is the real threat, with GDP money growth heading towards zero - a scenario not seen in any post-war depression.

"Who wins the debate will be down to the success, or otherwise, of the Bank's quantitative easing programme aimed at reflating the UK economy." However, it is not all doom and gloom as the FTSE continues to make gains.

Johnston said: "The FTSE100 has not looked back since it hit a six-year low of 3,542.4 on March 9 and is riding on a 12-week high..

"Global stock markets are proving remarkably resilient amid the economic gloom suggesting that all the bad news has already been priced in.

"It also suggests markets believe that the fiscal packages adopted by many governments worldwide will be sufficient to trigger an economic recovery.

"Investors who have kept their faith in equities throughout the uncertainty are being rewarded for their patience."